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Afternoon Note

Recession, Soft Landing Debate

By Charles Payne, CEO & Principal Analyst
1/24/2023 1:09 PM

The recession, soft landing debate continues, and while there are fewer ‘experts’ saying there will be a deep recession, most say totally avoiding it is a fairy tale.  It’s true, there’s a moment of Goldilocks in the air as hope grows the Fed will say one more hike, and then, a pause at the next FOMC.  Meanwhile, prices are coming down faster.

Philly Fed Service Survey saw a sharp decline in prices paid.

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And business see less cost growth this year from last.

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There is alot of anticipation for the first mega cap name in 2023 to report its financial results. Microsoft (MSFT) is expected to post revenue of $52.96 billion and earnings of $2.29. This is down from consensus of $2.55 three months ago.  Here’s the good news.  The company usually beats and a week after, the shares are much higher – except, it was the exact opposite last time.

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As earnings roll out, the reaction in bonds will be even more important. The next time the ten-year yield gets under 3.37%, and close there, it could spark massive buying.

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